Knight Frank report says 4,790 units launched in 2017, 66% lower than 14,009 units in 2016
Home launches and sales in Ahmedabad fell to a decadal low in 2017, even as prices increased by 1-4% during the year, a report by real estate consultant Knight Frank said. The study attributed the sharp decline in project launches to the twin regulatory changes of Real Estate Regulatory Authority (RERA) and Goods and Services Tax (GST).
The report showed that 4,790 residential units were launched in Ahmedabad in 2017, a decline of 66% from 14,009 units in 2016. Over 15,500 units were launched in 2015 and a little more than 14,000 in the year before that.
“Home launches increased by 55% sequentially in second half of 2017 to 2,916 units as against 1,874 units in the first half, but 44% lower than second half of 2016 (5,200 units). Developers held back on new launches in H2 of 2017 due to RERA and GST,” Balbirsingh Khalsa, director-Ahmedabad, Knight Frank, said.
At 15,741 units, home sales in the city in 2017 too were the lowest since 2010. The report said that home sales stood at just under 16,000 units in 2016 and 16,800 in 2015. It said that sales were tepid in spite of sops and discounts by developers. The second half of 2017 saw a 5% rise in sales at 7,800 units, but this was due to a lower base effect of H2 of 2016, the period when sales were hit by note ban.
“Home sales in Ahmedabad have steadied in the range of 15,000-16,000 units in past three years, sharply lower than 30,000 units that we saw in 2011 and 2012,” said Khalsa. Property prices rose by an average of 2% in Ahmedabad during the year, and it ranged from 1-4% in different areas. Prices rose by 1% in Prahladnagar and Chandkheda, 3% in Bopal and Navrangpura, and 4% in Ambawadi and Motera, according to the report.
“We expect home sales to pick up in 2018. Prices will also rise as costs are up. Moreover, inventory levels have fallen due to fewer launches, and hence developers are in a better position,” Khalsa said further.
The report pegged the number of unsold residential units in the second half of 2017 at 26,884, which fell by 29% from 37,835 units last year. “The unsold inventory in Ahmedabad is less than the demand of two years, which is a healthy sign,” he said.
North, West Ahd lead in sales
North and West Ahmedabad saw a sharp rise in home sales in the second half of 2017. Knight Frank said that West Ahmedabad, which comprises Prahladnagar, Satellite, Navrangpura, Ambawadi, Bopal and other areas, saw a sale of 1,876 units, 18% higher than in the previous year. Similarly, North Gujarat, comprising Gota, Chandkheda, Motera, among others, recorded sale of 2,589 units, a change of 18%. Home sales fell sharply in East Ahmedabad (-35%) and Central Ahmedabad (-17%), and grew marginally by 3% in South Ahmedabad.
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